What are the supplemental payments in addition to policy limits typically intended for?

Supplemental payments in an insurance policy refer to additional benefits provided by the insurer beyond the standard policy limits. These payments are specifically designed to cover costs associated with defending the insured in legal matters. Legal defense costs often include attorney fees, court costs, and other related expenses that arise during legal proceedings. This aspect of supplemental payments is crucial as it ensures that the insured is not financially burdened by costs necessary to protect their interests in a lawsuit.

While other types of expenses, such as property damage, claim handling fees, and medical expenses, may be covered under different aspects of an insurance policy, they do not fall under the category of supplemental payments specifically aimed at legal defense. This distinguishes the purpose and function of supplemental payments, highlighting their role in safeguarding the insured's right to a legal defense without the risk of exhausting the policy limits.